Why The XRP Lawsuit Moving To Federal Court Is Beneficial

Last week, the legal team for Ripple Labs removed a securities lawsuit relating to the nature of the native cryptocurrency of the Ripple blockchain, XRP, to federal court. The representatives of Ripple argued that the class action lawsuit was initiated by a group of investors with no geographical limitations and as such, the case shouldn’t be handled by a state court. The law firm, Skadden Arps, Slate, Meagher & Flom litigation partner Peter Morrison made it clear that due to the amount of the controversy exceeding the $5 million mark and it was brought on by over 100 members, Ripple Labs can rightfully remove the lawsuit to federal court.

“A putative class action may be removed to the appropriate federal district court if (1) the action purports to be a ‘class’ action brought on behalf of 100 or more members; (2) any member of a class of plaintiffs is a citizen of a state different from any defendant; and (3) the amount in controversy exceeds $5 million.”

According to the popular United States lawyer and a government enforcement defence and securities litigation attorney at Kobre & Kim, Jaker Chervinsky believes that the move on the legal team of Ripple Labs to improve its security lawsuit involving XRP to federal court is great.Chervinsky said:

“Ripple’s legal team showing some tactical brilliance here. It’s hard to explain the procedural manoeuvre in one tweet & I’m not going to thread this, but suffice to say it’s a seriously crafty attempt to go federal. Might not work, but slick regardless.”

If the class action lawsuit remained in the state court of California, Chervinsky said that it could still cover a national class action lawsuit. In addition to this, the Ripple Labs legal team needed a way to justify the relocation of the class action from state court to federal court. In arguing that class action lawsuits can be dealt with at the state court level, Chervinsky said:

“State courts exercise jurisdiction over residents of other states all the time. It’s not unusual for a nationwide class action to be resolved in state court. Also, the Securities Act of 1933 gives state and federal courts concurrent jurisdiction over private civil claims.”

As said by CCN, the American lawyer went on to explain that the team at Ripple Labs were likely to see the odds of winning the lawsuit to be better in federal court than in a state court as the team placed significant effort in removing the case.What are your thoughts? Let us know what you think down below in the comments!